The Ellen MacArthur Foundation’s latest report: The new bottom line: Policy levers to scale resale & repair for fashion reveals that while clothing resale and repair are multi-billion dollar opportunities, today’s economic landscape is fundamentally stacked against them. In the current linear system, it is often cheaper to manufacture new garments than to invest in the people and infrastructure required to keep existing clothes in use. The report highlights that the global secondhand market is already projected to reach USD 393 billion by 2030, growing twice as fast as the overall clothing market, yet businesses face significant headwinds. For example, resale and repair models are often burdened with double taxation and high labour costs.

To bridge this gap, the report’s modelling demonstrates that governments can drive competitiveness by utilising three existing policy levers: 
1. Reduce VAT to improve margins per unit 
2. Lower labour taxes for resale and repair jobs to reduce labour costs 
3. Implement Extended Producer Responsibility (EPR) with financial incentives for resale and repair activities 

In the EU, this targeted policy mix could raise gross profit margins to 55% for resale and 41% for repair, unlocking the investment needed to scale. This transition does not require entirely new regulatory architectures; rather, it requires finance, environment, and industry portfolios in national governments to work together to reward resource efficiency over virgin extraction. By narrowing the gap between linear and circular models, policymakers can drive local job creation and significantly reduce the environmental and financial costs of textile waste. 

Read the complete report here.